Property trade

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From: Anonymous


Hi All, what a great forum site - there is so much to learn and share with others.
My question is, I am looking at a property trading deal in Sydney. The property has a DA approved for dividing the existing property into three house sites.
There is an existing house plus I would build two houses on the other sites.
The figures look promising, however the 'killer' appears to be the GST on selling each of the properties.
I accept that GST is payable on the two new house sites, however I have received different views on whether GST is payable on the existing residence - it is more than 5 years old.
One lot of people say no GST is payable and the other says that if you change the land component, then GST is payable.
Also, does anyone have any other ideas of how to maximise profits other than what I am proposing in buying the property, do the construction and sell.
An idea mentioned was to leave the existing property in the current owners name, action the DA and sell off the existing house and pay the owners - this way I'll save stamp duty (and possibly GST?) then have the titles of the two blocks of land sold to me, then build and sell.
Apologies for all the questions, however I would appreciate any advice/ideas.
many thanks.
ColinT

 

[WebBoard]

Reply: 1
From: Emil Ajepoor


Colin,

Before you even begin to build, drop us an email - we maybe interested in buying and working with you as a JV partner.

Regards

email: [email protected]

 

[WebBoard]

Reply: 1.1
From: Anonymous


Help! I would like to wrap up this deal quickly before someone else sneaks in - any clarification on whether GST would be payable on selling a home that has the land made smaller after sub-dividing(keeping it in the present owners name) or the other option is if I buy all the property, do I incur GST on the resale of the existing house?
I am receiving conflicting answers.

Many thanks, Colin

 

[Robert]

Reply: 1.1.1
From: Robert Forward


Hi Colin

I'd suggest you call your accountant for an emergency meeting to get the right advise.

Myself, I've heard that the ATO were/are planning on introducing the fact that if you sub-divided a block of land or strata titled units (even if they were 50 years old) that they will see them as being "Brand New" thus causing GST to be payable.

When I read the article about the above the changes were only in "draft" format and I've not heard anything more since then.

I think it's still a very grey area and only your accountant can give you the right advise.

Cheers
Robert

The Sydney "Freestylers" Group Leader.